Tag Archives: ECONOMY

President Roosevelt points to a sign reading “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE,” while a banker and veteran look on in anticipation of more equitable cuts in federal spending.

In 1933, as the United States sought to pull its struggling economy out of the Great Depression, the American people looked for guidance from newly-elected President Franklin D. Roosevelt. FDR promised to reform the damaging actions brought on by his predecessor, President Herbert Hoover, and to improve the nation’s economic state. John Knott’s political cartoon, “Regardless of Dress,” addresses one of the many reforms enacted as part of Roosevelt’s New Deal: specifically, the Economy Act of 1933. This act reduced the amount of federal aid given to banking and veteran programs to equalize treatment of struggling American citizens. Evoking parallels to Andrew Jackson’s populist slogan, “equal rights to all, special privileges to none,” Knott’s illustration underscores the importance of Roosevelt’s impact on veterans and the banks through his New Deal economic recovery programs.

The Great Depression was the period from 1929-1939, during which time the American economy took an unprecedented downturn. After the stock market crash on October 29, 1929, the nation’s economic state began a precipitous decline, as consumer spending and investment plummeted. Job scarcity became such a widespread problem that by 1932, the nation’s unemployment rate had risen to 25% (Baughman “The 1930s: Government and Politics: Overview”). Hoover’s spending approach for aiding the effects of the Great Depression was an inclination to give “indirect aid to banks or local public works projects, but he refused to use federal money for direct aid to citizens” (Hoover “The Gilder Lehrman Institute of American History”). During Hoover’s Presidency, America’s budget deficit ballooned from a $734 million surplus in 1929 to a $2.7 billion deficit in 1932 (Morgan “Deficit Spending”). To compare it to today’s standards, while the 2017 federal government’s deficit rose to $668 billion, an $82 billion increase, that remains only a 12% increase rather than the 663% rise during Hoover’s term (Niv “US Deficit Spending Reached $668 Billion in Fiscal 2017”). Roosevelt’s election in 1932 brought on a series of reforms aimed to counter Hoover’s tactics. In his approach to economic recovery, however, FDR adopted a populist approach for addressing the struggles of the common man.

When Franklin D. Roosevelt took office in 1932, his actions immediately reflected the populist ideals of assisting ordinary American citizens, and his New Deal economic recovery plans were intended to directly help the American people. The First New Deal was a procession of economic reforms as well as a series of national aid and federal programs created with the purpose of bringing the United States out of the Great Depression; furthermore, these initiatives were promised to be implemented within Roosevelt’s first 100 days in office. Because an entire quarter of the US population was unemployed, these aid programs stretched across a swath of occupational categories and social classes (Baughman “The 1930s: Government and Politics: Overview”).

Programs such as the Federal Emergency Relief Act (FERA), which provided $500 million in grants directly to states to “infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed,” were aimed at mitigating the subsidiary monetary channels that, in the past, had slowed progress of economic improvement (Lumen Learning “Franklin Roosevelt and the New Deal, 1932-1941”).

Given the nation’s poor economic state, however, Roosevelt also aimed to refrain from unnecessary excessive spending. Thus, he introduced the Economy Act of 1933 which cut around $400 million from federal payments to veterans and $100 million from the payroll of federal employees (Morgan “Economy Act of 1933, Special to The New York Times). Not only did this act recognize the unequal distribution of governmental monetary resources, it also helped equalize funding through redistribution to people via Roosevelt’s newly created programs.

Alluding to the spending cuts spurred by the Economy Act of 1933, Knotts’ cartoon highlighted the shared sacrifice that was required for economic recovery, legislated in FDR’s populist policies, and inspired by Jacksonian Democratic themes. The illustration featured three figures: a banker/civilian, a veteran, and FDR. Roosevelt points to a banner hanging above their heads. The sign, which reads, “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE,” points to the reasoning behind the Economy Act of 1933 and FDR’s populist policies. During the Great Depression most US citizens were in need during those difficult economic times, and while FDR recognized the nation’s responsibility to those who served their country, he also stressed their equality with other citizens (The Dallas Morning News “Roosevelt at Chicago”). Drawing on that ideology, Knott suggested Roosevelts’ similarity to another populist president, Andrew Jackson. The quote boldly displayed and pointed to by President Roosevelt reads, “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE.” It is a famous populist slogan widely attributed to Andrew Jackson.

Jacksonian Democrats not only believed in maintaining a strong Federal Union but also in following the conviction that “no one man has any more intrinsic right to official station than another,” as well as in maintaining the assurance that “the already wealthy and favored classes would not enrich themselves further by commandeering, enlarging, and then plundering public institutions” (History.com Staff “Jacksonian Democracy” and Gale “Andrew Jackson”). By cutting their previous federal funding allowances, the aid given to veterans and the banking system was equalized by FDR when compared to other assistance programs. His actions were based on his affirmation of equal treatment of citizens and are directly and were comparable to Jackson’s views. Because veterans and banks were receiving significantly more aid compared to other institutions and groups, Roosevelt cut their funding, opening more opportunities for other struggling parties to receive monetary assistance, thus equalizing government aid program fairness (Knott “Regardless of Dress”).

“Roosevelt in Chicago,” an editorial that accompanied Knott’s cartoon, spelled out the aforementioned policies regarding veterans and banks alike and described Roosevelt’s take on the need for equalizing aid (re)distribution. The editorial discussed FDR’s emphasis on “the plain duties of citizenship,” another reference to Roosevelt’s Jacksonian-inspired populist agenda for economic recovery. Roosevelt’s New Deal ushered in the dawn of a new American economic era in both its policies and reforms (The Dallas Morning News “Roosevelt at Chicago”).

The Great Depression was a devastating period of American history for all US citizens. As the economy struggled, Roosevelt was not only faced with how to bring prosperity to the nation but also how to treat all social classes under his altering reforms. His actions highlighted the repetition of history and the new takes future leaders are able to implement to adjust for the times.

Andy Singer’s cartoon, Economic Fantasies, cleverly depicts both a stereotypical conservative and a stereotypical liberal and their economic fantasies. The top of the cartoon reads “Choose one:” giving the reader instructions to choose from the two options. One being the “Conservative Economic Fantasy” which is, “If we keep cutting taxes and spend less, everything will get better.” The other being the “Liberal Economic Fantasy” which is, “If we raise taxes and spend more, everything will get better.” The appearance of both of the men in the cartoon are clearly derived from stereotypes based their political philosophy. The conservative is wearing a tie as well as traditional half moon reading glasses, has a clean shaved face, and also has his suit jacket buttoned. The liberal however is not wearing a tie, has circle shaped glasses, a full mustache and goatee, and has his suit jacket unbuttoned.

The cartoon was originally published in February of 2016, and at the time the 2016 presidential election campaign had just started. Just like any other election the candidates gave their proposed economic plans. As expected from a republican candidate Trump’s economic plan was expansionary and called for tax cuts and reduced spending (Amadeo, 2017). On the other hand Clinton’s economic plan was contractionary and called for both an increase in taxes and spending (Amadeo, 2017). Both their tax plans aline with the “economic fantasies” in the cartoon, but again there comes the decision of which side to go with. As the economy is constantly changing the argument of what policy is best in terms of continuous growth and overall prosperity is inevitable.

Singer’s choice of using the word fantasy is an accurate way of putting it, because although both plans have their obvious benefits they still have flaws. Due to Trump’s plan being expansionary it was estimated to increase GDP by 11.5% and create 5.3 million jobs (Clinton vs Trump, 2016). His proposed plan would also reduce government revenue by 10 trillion dollars over the course of 10 years. Due to Clinton’s plan being contractionary, it would help reduce government debt by 191 billion after a decade (Clinton vs Trump, 2016). However it would also slow down economic growth in the form of a 1% GDP decrease and the loss of 311,000 jobs. Either way things will be better in some way but not “everything will get better.”

This dilemma of seeking a suitable economic policy has been common throughout the history of the United States. Within the Great Depression in the 1930’s, the same issue arose. Marriner S. Eccles the head of the Federal Reserve proposed an increase in tax in order to balance the budget (“Eccles Explains”, 1937). The budget was at a deficit of $26.4 billion and a tax increase was the only way to balance the budget but it also meant that the recession would continue (“1937 United States Budget”). In opposition of this proposal was that of the American government and the people of the United States, who advocated for tax cuts and decreased spending. With this plan the budget would’ve still been at a deficit but the recession would’ve come to an end. The message of Singer’s cartoon can even be applied to this situation during the Great Depression. With both plans certain things would be better but again not “everything will be better.”

With an ever-changing economy it’s not a surprise to see this issue has become so common since the government is always trying to protect its people from devastating changes in the economy. Singer’s cartoon basically sums up what the two main opposing views and how they’re beliefs are so extreme that they could be referred to as fantasies.

According to the business cycle, economic activity is in a cycle that is both necessary and inevitable. The business cycle consists of expansion which is defined by increased output, employment, and profit, followed by contraction which includes decreased input, growing unemployment, and profit losses (Sherman, 2014). It is commonly accepted that this cycle contributes to the progression of a capitalist economy. Another key characteristic of the cycle is the belief that in a free market economy the government should limit its intervention and just let the cycle play out naturally. However, the Great Depression was a severe and unprecedented contraction period that lasted longer than expected, and the absence of the natural forces that led toward recovery called for government intervention in the form of expansionary fiscal policies (May, 2004).

The Great Depression started in 1929 for the United States, leaving devastating effects around the globe lasting throughout the 1930’s. When Franklin D. Roosevelt became president in 1933 he immediately took action implementing the New Deal, which involved several federal programs that stimulated financial reforms and regulations. Although the New Deal’s purpose was to ignite the economy, many of the programs and reforms proposed never came to fruition due to the conflicting views in Congress. Those conflicting views were a commonality during the Great Depression and often were expressed through political cartoons.

On March 18, 1937, John Knott’s Speaking of Raising Taxes was published in the Dallas Morning News; during that time the United States was still consumed with the Great Depression and its ramifications. Depicted in the cartoon, Marriner S. Eccles was appointed as the head of the Federal Reserve Board, under Franklin D. Roosevelt’s administration. The supplemental editorial Eccles Explains, provided context for the cartoon. It stated that Eccles intended to balance the budget through an increase in taxes (“Eccles Explains”, 1937). This new tax proposal was part of a contractionary policy that would make it possible to balance the budget, which was at a deficit of 26.4 billion dollars (“1937 United States Budget”), at the cost of allowing the recession to continue. An alternative to this proposal was an expansionary policy that called for deficit spending and tax cuts in order to boost the economy onto a path towards recovery from the recession.

Speaking of Raising Taxes, depicted Eccles saying, “This is no money at all. Uncle.” in addition to holding a paper in his hand that reads “higher taxes to balance budget”. Sitting in front of him is Uncle Sam who’s saying, “Why not cut expenses and stop borrowing?” while clutching one of the many stacks of money lying around him labeled “record income tax returns.” Knott’s cartoon illustrates Eccles, the chairman of the federal reserve board, in a quandary with the Uncle Sam in trying to figure out the best means for restructuring the country in recovery from the Great Depression.

Before being appointed as chairman of the Fed, Eccles was assistant to Treasury Secretary Henry Morgenthau Jr. Prior to going into politics, Eccles made his own conclusions as to what caused the Great Depression. His suggestions revolved around the concept that to keep a sound economy there must be constant movement of money. By this, he meant that instead of having money just sitting under large corporations and the rich, that money should be distributed among the lower income groups. This concept was similar to the idea of famous economist John Maynard Keynes and what is now known as Keynesian Economics. Keynesian Economics calls for expansionary policy in times of recession. (May, 2004) Keynesianism generally recommends countercyclical policies. For example, in order to suppress inflation, the government can increase taxes or reduce outlays.

Within the cartoon, Knott illustrates opposing views through a discussion between Eccles and Uncle Sam. In this case, Uncle Sam represents both the national government and the American people. Eccles stating, “This is no money at all. Uncle ” justified his proposal of higher taxes. The stacks of money lying around Uncle Sam labeled, “record income tax returns” represented what the outcome of what Uncle Sam said. With taxes being cut from such high rates the returns would be massive, revealing why Uncle Sam is clutching a stack of money. Taxpayers would then be able to spend their new disposable income and boost growth in the economy. The recurrence of the dilemma on whether to choose an expansionary policy or contractionary policy is inevitable as the economy is constantly changing.

The ‘Auto’ Industry begs ‘Obama’ for more ‘Bailouts’ after they are unsatisfied with all previous attempts from the government to help revive the auto industry.

During the 2007-2010 economic period, the auto-industry bailout was a huge controversy. It began with the collapse of many banks and very highly affected the auto industry. Along with the persistence of bad management, which lead to a poor response to the unexpected downfall, the labor union workers were outraged and demanded the unions do something. This brought the major automobile companies: Chrysler, Ford, and General Motors borderline bankrupt. The quality of these company’s products were already being scrutinized for not holding up to the standards that they had in previous years. In addition, their workers were also being paid dramatically low wages which made the matters worse since they were so close to bankruptcy. The public saw the low wages as an attempt, by the companies, to save money and at least stay afloat in the industry, but even with spending less money on labor the companies still found themselves struggling financially. During that time, the automobile companies requested bailout money in an effort to save their companies and their workers. Many factors were taken into account on making the decision of whether or not the government would grant the auto companies the money. The effect the decision would make on the country’s economy was the major influence in the situation. The dilemma arose that if the country lost three major auto companies the economy would suffer. On the other hand, if the government bailed the companies out the taxpayers would have a huge chunk of money taken from them; As the loss of so much tax dollars, through the act of bailing out the auto companies, would have a devastating effect on the economy. The factors were discussed and the American government decided to allow the release of funds towards the bailout of the automobile companies. The government’s decision to allow the bailout money to be issued to the automobile companies had caused the resentment in the tax payers towards the government, hurt the economy even more with this event having occurred at a bad time of economic recession, and brought negative connotation to ‘Auto Industry’ as they had received an unfair advantage.

Published on February 19, 2009 in The Buffalo News Newspaper, Adam Zyglis’ cartoon titled, “Second Auto Bailout” illustrates how the auto industry continues to misuse aid money and disappoint the country no matter how much help they are given; In this case it was widely believed that the auto industry had received an unfair advantage over all other struggling industries towards the end of the recession of 2007-2009. His cartoon shows Barack Obama as a baseball player who seems to be the supplier for the ‘Bailouts’ as they are depicted as steroids. The character representing ‘Auto’ asks Obama if he’s “Got Anything Stronger??” as he already has plenty of syringes stabbed into his back along with the many more used syringes in his hand that he hides behind his back. Obama is pictured as a weak, terrified, and disappointed individual while ‘Auto’ is huge, aggressive, and scary individual because he misuses, by over using, the ‘bailouts’.

The Great Recession, from December 2007 to June 2009, was ultimately the result of the failure of an 8 trillion dollar housing bubble. The loss of such wealth led to cutbacks in consumer spending. As a result, a collapse in business investments occurred, along with the financial market chaos combined with this loss of consumption. Once the business investments and consumer spending was depressed, extensive job loss followed. 8.4 million jobs were lost in 2008 and 2009 from the U.S. labor market. It was the worst employment devastation since the Great Depression. The country was already in a bad state in the midst of a recession which made the bailout more costly that it would’ve been if it was in a stable economic period. The country, economically, could not afford this act to bailout the Big 3 auto companies. This would explain why Obama, in Zyglis’ cartoon, is scolding ‘Auto’ and why Obama has his back turned to ‘Auto’. Obama is making an effort to ignore ‘Auto’ because the country cannot afford to bailout the auto industry, however with the great recession occurring, the spotlight is really put onto the auto industry and it’s struggles so it is difficult for Obama to NOT acknowledge this issue.

Similar to the situation in John Knott’s 1937 cartoon entitled, “There’s an Idea”, the workers in Knott’s cartoon are basically striking for more and more demands they want from the government. Over 250 strikes took place in the auto plants within the span of 3 months, so it’s safe to think they had to be asking for a bit too much and had excessive demands. In Zyglis’ cartoon ‘Auto’ asks, “Got anything stronger??” as ‘Auto’ already has many used syringes; ‘Auto’ is wanting too much. In 1973, America experienced an oil crisis which caused the oil prices to rise from $3 per barrel of oil to $12 per barrel. At this time, gas guzzlers were popular vehicles as muscle cars took over the era. American muscle cars became very popular and the auto companies were bloated and successful. As the unexpected and unanticipated oil crisis hit the country, the auto industry had no time to prepare. As result, Japanese auto plants were established in America which was a huge blow to the American auto industry as more competition was added. American vehicles had been producing bigger and more fuel-inefficient cars for decades when the Japanese manufacturers arrived and produced smaller and more fuel-efficient cars which would come to outperform the american style models. The auto industry needed a bailout and the first bailout was issued after this crisis, which is why this cartoon is titled “SECOND Auto Bailout” as it refers to the bailout during 2007 to 2009 recession.

During the late 2000s, ‘the steroid era’ was a term created in Major League Baseball when many players were thought to have used performance enhancing drugs, or PEDs, in the form of steroids. During this period, offensive output had increased dramatically. In Zyglis’ cartoon, his reference to steroid use alludes to ‘the steroid era’ with the syringes of steroid representing ‘bailouts’. It is likely that the reference could be towards Alex rodriguez, or A-Rod, as he admitted to using steroids in his MLB career, from 2001 to 2003, on February 9, 2009. The cartoon was drawn on February 19, only 10 days after the confession. In addition, at the time of the the confession, A-Rod played for the New York Yankees who are notorious for wearing pinstripes on their gameday uniforms, which many baseball fans see as an outdated fashion and ugly. In the cartoon, the players are wearing pinstripes. Going along the fact that Steroid use in sports was always referred to as an “unfair advantage”, it’s very likely that Zyglis used this reference to the bailout. Since the auto industry required a bailout in the 1970s and the government decided to give them another bailout during the recession was seen by most americans as an unfair advantage just like what steroids does. During the recession, out of all the corporations that were struggling and needed some help, the government decided to give the auto industry another bailout rather than give it to an industry that hadn’t had one yet.

In a 1937 John Knott cartoon, Legislature hands Texas a document containing a newly proposed House Bill, simultaneously reaching into Texas’s pocket.

In March of 1937, tax legislation bombarded Texas politics. Fred Mauritz, a member of the Texas House of Representatives in the 45th State Legislature, proposed a bill that month, which would generalize tax remission policy. The “Mauritz Bill,” as it was referred to at the time, aimed to distribute $9,000,000 per year in state tax money amongst all counties in Texas, for five years years (“In Sales Tax Squeeze”). The bill was surrounded by political and economic stress caused by the financial needs of the the counties, the lack of revenue of the State, and disagreement between Governor James Allred and the Legislature regarding the remission of taxes — the governmental action of sending excess tax money back to the public for various reasons, rather than keeping the money in its own hands (Texas. Exec. Allred. “Senate Bill No. 114 Veto”). In his political cartoon, “The Tax Expert,” from the March 26, 1937 publication of the Dallas Morning News, John Knott portrayed the ineffectiveness and self-contradictory nature of the cycle of taxation and distribution of funding, and the motives of the parties involved in the Mauritz Bill.

Knott’s cartoon goes straight to the point, dominating the foreground of the image with two men: the one on the left labeled “Legislature,” and the one on the right labeled “Texas,” who is better known as “Old Man Texas” — a recurring character Knott featured in many of his cartoons and based off of the broad head and bushy mustache of one of his acquaintances, James A. Boyd (Administrator). The man on the left is clearly handing a document over to Old Man Texas, which contains the text, “Tax Remission — Nine Million Dollars.” While one hand of “Legislature” is occupied with passing on the document, the other hand is simultaneously reaching into the pocket of “Texas,” which is full of cash, and is identified as “New Taxes.” The Legislature man appears to be grinning as he smokes his cigar, and interestingly, the Old Man Texas’s face holds the expression of shock and worry as he holds the paper in his hands. Knott undoubtedly believed that the bill violated the fundamental concepts his famous character represented: “honesty in government, low taxes, and property ownership” (Perez).

While the man on the left represents the 45th Legislature of Texas, he also bears a striking resemblance to none other than the “Tax Expert,” Fred Mauritz (Fred Mauritz). The medium-length, wavy hair and round glasses of the character drawn by Knott and the context of the cartoon present evidence for the argument that the man labeled as “Legislature” was in fact meant to be Mauritz, but whether he was actually being represented is still up for debate. What cannot be debated, however, is the fact that Mauritz was the mastermind behind the tax remission bill displayed in the cartoon. The House member proposed the bill in response to others that were already in place and providing 40 Texas counties with tax remission, as well as the introduction of several much more specific tax remission proposals that focused only on certain counties (“In Sales Tax Squeeze”).

The cartoon’s accompanying editorial, entitled “Tax Remission,” described this as a “trend toward remission of county taxes” (“Tax Remission”). The trend had been sustained by House Bill No. 22, which extended tax remissions to Galveston County for five years for the construction of the seawall and other measures to protect the city from coastal flooding (Texas. Legisl. House.“Extending the Remission”). It was apparent that several counties needed governmental aid as their municipal funds were depleting and something had to be done to combat the destruction of Mother Nature. Following the Galveston bill were similar proposals to provide tax remission for flood control purposes to Harris county as well as the Pease River Flood Control District counties of Foard, Cottle, Hardeman and Wilbarger (“Allred Vetoes”). Although proposals such as these had good intentions, the unequal distribution of State tax money throughout the State of Texas was a growing issue. The Mauritz Bill aimed to end the discriminatory effects of specific tax remission bills by remitting taxes to all Texas counties (Texas. Exec. Allred. “Senate Bill No. 114 Veto”). It was widely supported in the Legislature, as it passed through the House, was seen with favor by the Senate State Affairs Committee, and showed promise of passing in the Senate (“Tax Remission”).

But on March 24th, 1937, as recorded in the House Journal of the 45th Texas Legislature, Governor James V. Allred declared his opposition to such bills as he announced, “We have got to stop tax remissions somewhere” (qtd. in Texas. Legisl. House. “Journal of the House 1298”). In his veto message regarding Senate Bill No. 114 — the Harris County Bill — he claimed, “I must look at the welfare of the State as a whole, and in doing that, it now becomes my duty to veto this and other similar Bills.” Allred was not in opposition to the actual projects that the proposed tax remission was to go toward, but he recognized that to provide such funds was not feasible. Feeling the effects of the Great Depression, the State was facing a shortage of revenue and could not afford giving ad valorem tax money back to the counties; doing so would both add to the state’s deficit and hurt the credit of the state. Further, the passage of a bill for one county was bound to be used as an argument for another similar bill to be passed for another county. And finally, the State was not allowed to supervise the expenditure of tax remissions, and therefore counties could easily put money towards anything they wanted no matter what was termed as the initial purpose for the money (Texas. Exec. Allred. “Senate Bill No. 114 Veto”). In Allred’s veto against House Bill No. 18, he stated, “In view of the depleted condition of the Treasury and the fact that no revenues have been raised, I have no other alternative.” The State just could not take another loss in revenue given its financial condition at the time (Texas. Exec. Allred. “House Bill No. 81 Veto”).

Allred could foresee what was to come if tax remission policy was passed into law, and he shared his perspective with Knott. Clearly, giving “excess” tax money back to the counties was not the end of the deal. In the cartoon, as Old Man Texas, ultimately standing for the taxpayer and the integrity of the state’s financial system, is engrossed in the Mauritz bill placed in its hands, “Legislature” is busy digging in his, or the taxpayers, pockets, scavenging for additional revenue. Knott showed that the proposed tax remission was really a hoax; the money would be given back to the counties by means of an illusory rebate, which would distract the taxpayers from the reality that their taxes would eventually be increased in order for the State to make up the difference. In turn, the State was to receive the same amount of money, and the counties funding that could be used according to their desires, while “Old Magician Taxpayer,” had to “produce out of his hat once more,” and “in finality pay the bill” (“Tax Remission”). The cartoon displays the political struggle of the time, in which the Democratic Party under President Franklin Roosevelt pushed for more relief programs as a part of the New Deal — conceptually similar to tax remission — while the more conservative minded, characterized by Knott’s Old Man Texas, resisted with the argument that those policies of governmental intervention went too far and would find unfavorable sources of funding; that is, taxes (“New Deal”).

In 1937, Texas taxpayers were at the time paying sales taxes, excise taxes on commodities such as fuel and oil, and local property taxes. Income tax had not even been put into place (“Texas” 864). Allred, in order to reduce the economic burden on taxpayers and particularly low-income groups, desired to keep taxes low and refrain from using a state sales tax as a means to generate revenue (Ewing). As his opinion was reflected in Knott’s cartoon — that is, tax remission would have required higher state taxes in order to be practical — the motives of the Legislature are much more ambiguous. While it could be argued that Mauritz and his like-minded colleagues genuinely wanted to assist the counties that were in need, and do so fairly, there can be little doubt that they did not not look ahead at the implications of such a plan. The grinning face and sneaky hand of the man on the left of the cartoon indicates one perception of the legislative motive: personal gain as a result of increased state revenue with the benefit of satisfying constituents. The title implies that Mauritz was a “Tax Expert,” and was therefore well aware of the side-effects of his bill.

Unfortunately, the Mauritz Bill was never put into place for us to see the result, as it was put on hold in the Senate and never made its way to Allred’s desk for signing (“In Sales Tax Squeeze”). In fact, most tax remission efforts of the 45th Legislature were unsuccessful in the end, thanks to the exercise of checks and balances in the Texas governmental structure. However, Knott’s cartoon still highlights the political conflict of the time. While the Legislature wanted tax money to be sent back to the counties so that they could aid the people at their discretion — a sort of roundabout tax cut — the question arose of how funds would be raised by the government to balance its revenue loss. The only real options would have been either the contradictory implementation of higher taxes, or the dangerous submission to adding to the budget deficit. Further, the issue surrounding Knott’s cartoon brings up another issue: the victimization of the taxpayer. As both sides of the arguments at the Capitol in the 1930’s strongly held their ground, the regular people of the state were to sit and wait without providing direct input until a bill was placed into their hands. At that point, they would have had to agree to whatever terms were decided; hence, the anxiety rather than excitement expressed in the face of “Texas” in Knott’s cartoon. As it would be seen throughout history and even today, fiscal policy such as the Mauritz Bill can fix one problem, but only by raising another; there really does not exist an absolutely sound answer to the economy.

In a 2017 cartoon by Gary Varvel, President Donald Trump is depicted as Johnny Appleseed tossing around the “seeds” of tax cuts, while the Democratic Donkey questions the practicality of his actions.

The issues of tax legislation and general economic ideology have dominated the political sphere of the United States throughout the nation’s history, and being central matters of debate and partisan disagreement they have carved out two primary sides of the argument over time. Today, President Donald Trump’s rhetoric regarding a tax revolution and the ensuing Legislative proposals offered by the Republican Party are characteristic of supply-side, or trickle-down, economic theory, in which business investment is stimulated by making funds more available to corporations and the wealthy, and as a result economic improvement occurs from the top-down. This policy was also a core component to the presidencies of both Ronald Reagan and George H.W. Bush. Others, however, have pushed for the style of Keynesian economics, or the theory that government spending is the key to economic stimulation, as seen by President Barack Obama’s economic policies. Both theories face the issue of finding sources of funding to supplement losses of government revenue that result either due to spending more or receiving less.

Gary Varvel, an opinion cartoonist for the Indianapolis Star Newspaper, published the cartoon, “Economic Growth Seeds,” on April 28, 2017 (Varvel). The cartoon refers to President Donald Trump’s adamant announcement of his plans for the “largest tax cut in our country’s history” (Walsh). Moreover, Varvel reveals a particular case of the ongoing argument of economic policy and the question of how the government is to maintain its revenue while implementing its policy. The cartoon shows the perspective of both sides of the Trump tax cut debate and its consistency with politics throughout history, and raises the issue that there lacks a decent means in which to respond to the funding question; usually the federal budget deficit takes the hit.

Varvel’s illustration consists of two characters: President Trump on the right and a personified donkey on the left, which symbolizes the Democratic Party (Makemson 256). Varvel doesn’t portray President Trump sporting his normal presidential suit and working the Oval Office, however. The cartoon instead depicts Trump as John Chapman — more widely known as the folk hero, “Johnny Appleseed” — tossing seeds into hills of plowed fields from a large bag labeled, “Tax Cut Seeds.” Chapman, born in Massachusetts in 1774, traveled throughout Pennsylvania and Ohio to harvest apple nurseries and sharing his knowledge with settlers on the American Frontier. In the cartoon, President Trump, or Mr. Appleseed, appears to be walking with a haughty and confident posture while carelessly throwing the seeds all around. In contrast to Varvel’s depiction, Chapman planted his apple seeds for strategic economic reasons (“Johnny Appleseed”).

Such an alteration of the Appleseed story conveys a dynamic of order in chaos present in the Trump tax plan, in which his idea is that his concept would distribute growth itself. This element of simplicity may be Varvel’s reason for referring to Johnny Appleseed, who left the growth of his apple trees to nature and the people along his path whom he taught how to tend to the trees. Similarly, Trump and the Republican tax cutters are relying on and trusting the natural process of economics for their “seeds” to grow and prosper.

The other character, the Donkey/Democratic Party, is standing behind Trump’s path of travel, leaning over with his hands extended outward toward the seeds on the ground in a gestural expression of disbelief as he questions with a dropped jaw, “How are you going to pay for this?” The face of Trump appears to be whistling and completely ignorant of the donkey’s concerns. This interaction reveals a common issue in politics, in which one side questions the other’s proposal with the age-old dilemma of how to and who will pay for it; usually the party with their hands on the Congressional reigns simply ignores the opposition. Despite the cartoon’s original caption, which states, “Impatient Democrats seem not to understand the principle of sowing and reaping,” the Democrats do have a right to pose this question, especially because the idea behind Trump’s tax cuts has been seen in our country before (Varvel).

Specifically, this idea was featured in 1980’s America as supply-side economics rose to prominence. When Ronald Reagan became the 40th president of the United States in 1981, he faced a flurry of major economic issues. The country was still recovering from the Vietnam War, prices were increasing rapidly as a result of a Middle Eastern oil embargo, and a recession was well under way after a long period of stagflation in the 1970s. Thus was introduced “Reaganomics,” which consisted of supply-side economic policy — removing impediments to the supply of factors of production by implementing spending cuts to reduce the size of government and a monetary policy that controls inflation, eliminating federal regulation on businesses, simplifying the system of tax brackets and a broader base, and cutting income taxes across the board to encourage investment and allow for money to trickle down to the private sector (“Reaganomics”). The Economic Recovery Tax Act of 1981 introduced a tax rate decrease from 70% to 50% for the top tax bracket and a drop from 14% to 11% for the lowest bracket (Schein 650). Soon after, the Tax Reform Act of 1986 implemented major changes to tax policy, including the simplification of income taxation to three brackets with the rates of 15%, 28% and 33%. The Reagan Tax Cuts aimed to stimulate the economy by allowing for more investment, and in broad respect succeeded in improving the economy (“Tax Reform Act of 1986”).

The Trump-backed 2017 Republican tax plan functions in a similar way, and would be the first massive tax overhaul since 1986 (Financial Advisor). It follows the supply side concept that has become a central component of the Republican Party since the Reagan Administration. Although still incomplete, Trump’s prospective bill sets out to simplify the income tax brackets for individuals and families from seven to three, solidifying rates at 12%, 25% and 35% (Bryan). However, due to criticism there will most likely be an added fourth bracket at the top (“Trump Discusses”). As a result of the proposal, more of the middle class in Trump’s plan will be paying what is currently the rate for only the lowest middle class bracket. Additionally, the plan introduces the “Zero Tax Bracket,” in which the standard deduction is expanded to nearly double what it is now, requiring that the first $12,000 of income for individuals and $24,000 for married couples be exempt from taxation. The plan also aims to lower the highest tax bracket from 39.5% to 35%. The greatest change, however, involves business tax rates. With the principle of supply-side economics at the heart of Trump’s political stance, his proposed tax reform will lower the corporate tax rate from 35% to 20% (Bryan). It would also lower the pass-through business tax rate — the rate of taxation of small business profits that go directly to individuals — from the top bracket level of 39.6% to the new middle level of 25% (Morgan).

The problem with Trump’s tax plan, and what ended up being the weakness with similar plans put in place previously, is the national budget deficit. The Reagan Tax Cuts — though not completely alone, as they were accompanied by Congress’s failure to cut domestic spending and the defense expense at the end of the Cold War — contributed widely to the $1 trillion federal deficit in the 1980s (“Reaganomics”). The Bush Tax Cuts in the early 2000s followed the same trend. H.W. Bush put in place measures to incentivize production, but while economic growth did occur, increased government spending in a time of the September 11th terrorist attacks in New York City and the wars in Iraq and Afghanistan caused further depletion of the national revenue (Evans 17-19). In Trump’s and the Republican’s case, the new tax codes would cost the national revenue $4 to $6 trillion in the next 10 years, according to the Tax Foundation, and no substantial proposals have been put forth to offset this loss of revenue (Stewart). Some Republicans claim that new revenues will be gained from eliminating tax loopholes and — as per the Johnny Appleseed concept — the economy will take care of itself if investment is allowed to increase (Morgan). The tax plan will also eliminate most itemized deductions and the state and local tax deduction, which are both potential sources of revenue (Bryan).

Ultimately, the main claim of both Varvel, Trump and many Republicans is that the tax cuts alone are the seeds of economic growth; although there may be a slight deficit as the seeds solidify their presence in the ground and establish their roots, in time they will sprout and the economy will grow on its own. However, in an interview with House Speaker Paul Ryan in September of 2017, he did not promise the tax overhaul would not increase the federal deficit, and said the primary goal was to “bolster economic growth” (“The Latest”). The question of how the government plans to balance the upcoming loss of revenue is still up in the air.

Varvel’s cartoon bears several parallels with John Knott’s March 26, 1937 cartoon entitled, “The Tax Expert,” which referred to a tax remission bill proposed in the Texas House of Representatives — a topic of controversy in the state in the 1930’s (Knott). First, the bill Knott portrayed was fueled by the same idea behind Trump’s proposed tax cuts, ultimately aiming to provide the same kind of economic relief in a time of financial difficulty for citizens. While Trump today faces decade-old remnants of the Great Recession of 2008, the Texas Legislature in 1937 was caught up in the distress of the Great Depression of the 1930’s. The 1937 tax remission proposal intended to provide a tax rebate to all Texas counties, which could then use the money as they pleased to improve the conditions of their respective areas. In the same way, Trump’s plan maintains a large focus on cutting taxes for businesses with the thought that if there was more money available to be spent at the corporate level, investment would increase and thus “[extend] economic opportunities to American workers, small business, and middle-income families” (Bryan). Essentially, the overall goal of both measures was and is to to establish a fairer and more evenly distributed method of taxation by getting the money out of the hands of the government and into the control of smaller units — Texas counties and United States businesses — and trusting the basics of economics to guide the money into the hands of the people at every level below.

In regard to balancing the government revenue with the release of funds in the form of tax remission or tax cuts, both cartoons emphasize the uncertainty that comes with such measures. In Varvel’s cartoon, the donkey asks the obvious question about the course of action in place to make a tax cut feasible in terms of the federal budget. The fact that the donkey is empty-handed and Trump is only holding the tax cut seeds and no other economic measures proposes that there is not a good, tangible method made available as an offset to the revenue that will be lost as a result of the cuts, and Democratic Party is skeptical of the Republican claim that the cuts themselves will consequentially refill the revenue by means of the trickle-down model. Opponents of the Trump tax reform believe that it is likely that there really isn’t a decent way to pay for the plan and therefore a large federal budget deficit would ensue (Stewart). Knott’s cartoon displayed the same sort of doubtfulness, suggesting that the passage of the tax remission bill could not in reality stand alone without some way to balance the budget. In Knott’s view and the view of the democratic governor at the time, James Allred, the likely result of large-scale tax remission would be higher taxes for the regular taxpayer, as depicted by the legislators hand reaching into the pocket of Old Man Texas for money (“Tax Remission”).

The opposition — primarily the Democratic Party — has historically offered a different solution on the other end of the spectrum of economic policy. The concept of Keynesian economics has been the dominant force of Democratic legislation since President Franklin D. Roosevelt’s utilization of the theory in the New Deal after the onset of the Great Depression of the 1930’s, and the large amount of government spending required by World War II that proved to improve the United States economy (May 540-541). Despite being opposed to the Trump tax cuts on the basis that they will cause the deficit to bubble to an unhealthy level because there is no other source of revenue as a part of the plan, Democratic policy has been characterized by the same problem. Responding to the 2008 Recession, Obama implemented the American Recovery and Reinvestment Act, which largely increased the government’s spending while reducing its revenue-raising options (Sahadi). Thus, the roles of Varvel’s cartoon were reversed, as members of the Republican Party, concerned about a ballooning deficit themselves, criticized the policy with an argument similar to that of the Democratic Party in response to Trump’s plan.

Both cartoons highlight that it is extremely difficult to come up with a balanced fiscal policy. No matter the side — republican, democratic, conservative, liberal, or any other party or ideology — there will be opponents claiming that there is no way to pay for the proposed plan. As seen in both 1937 and 2017, the fight over the government’s role in the economy and ensuing impact on the federal or state budget deficit has remained fundamentally the same. The cases of Knott and Varvel portray the concept of the government placing control over money in the hands of the governed to improve their financial situation and ultimately the economy as a whole, and the opposing argument that there exists no viable source to provide those funds to the people. Yet the two sides can easily be switched when the government spends excessively. In general, the major economic ideologies of supply-side economics and Keynesian economics differ only in who is put in charge of spending — either the people or the government, respectively — but both lead to the same problem of balance. As we move forward, it is important to realize that the same problem may have many different methods for solving it, and while the economy is a massive enigma, by working together we can begin to progress toward better and better reform.

Stewart, James B. “Economists Fear Trump’s Tax Plan Only Heightens a ‘Mountain of Debt’.” The New York Times, The New York Times Company, 27 Apr. 2017, www.nytimes.com/2017/04/27/business/economy/trump-tax-plan-deficit-column.html.

Nate Beeler’s cartoon depicts the 5th anniversary since the Stimulus Package, known as the American Recovery and Reinvestment Act, was signed into legislation, and how the act was a waste of money.

In the political cartoon “Five Year Anniversary,” by Nate Beeler, five stacks of one hundred dollar bills are set on fire on top of a cake that reads “2009 Stimulus.” The five candles represent the Stimulus Package’s, also known as the American Recovery and Reinvestment Act, five years of age upon being signed into legislation by Barack Obama in 2009. Beeler’s cartoon depicts the idea that the ARRA wasted money rather than pushing the economy out of the Great Recession.

In December 2007, the United States experienced a time of rising unemployment and declining GDP (gross domestic product) that lasted until 2009. This period was dubbed the Great Recession due to the severity of the negative impacts. The U.S. National Bureau of Economic Research defines a recession as a “period of at least two consecutive quarters of declining levels of economic activity” (Krabbenhoft), and during the time span between 2007 and 2009 GDP decreased by 3.5 percent and the unemployment rate increased more than 5 percent. The gross domestic product indicates the total value of goods and services produced over a period of time, so production and consumer spending decreased drastically. The government attempted to alleviate the unemployment rate and increase economic growth by creating what’s known as a multiplier effect. The multiplier effect occurs when there is an increase in final income from the increase in spending from the initial stimulus. Consumer expenditures make up 70 percent of GDP, and increasing consumer expenditures would create this effect, for consumption leads to the selling of goods and so on. Business investments are also a main component of GDP, and providing business incentives to increase the level of investment was also critical to alleviating the economy. With these two conditions kept in mind, President Bush signed the Economic Stimulus Act of 2008 into legislation. The ESA consisted of 3 provisions: the first provision provided a tax rebate for taxpayers while the second and third provided tax incentives to businesses to stimulate business investment. Unfortunately, consumer spending did not increase as the government hoped it would. Many households preferred to keep their money in their savings rather than spend it or pay their debts; thus, the multiplier effect did not take off. The tax incentives for businesses were also ineffective because the success was minimal and did not improve the economy; therefore, the ESA was failed, but it inspired a new act that was created by the next president, Barack Obama.

After becoming president, Barack Obama signed the American Recovery and Reinvestment Act of 2009 into legislation. The ARRA allowed people to keep a larger segment of their paychecks, provided tax credits for homebuyers, college expenses, and home improvements. Essentially, people got more than a single rebate and had more of an incentive to increase consumer spending. The ARRA also provided money for the government to improve health care, education, and infrastructure in order to create more jobs for the public and decrease the unemployment rate. Despite these efforts, the economy continued declining; however, GDP increased slightly during the third quarter of 2009 and fourth quarter of 2013, but unemployment continued to increase. Although the ARRA played on the idea of the multiplier effect, it did not work because people either lost hope during the recession and stopped looking for jobs or used their money in ways the government didn’t intend. The ARRA had good intentions, but nothing occurred the way the government believed or wanted it to happen. This relates to John Knott’s cartoon, “What’s the Next Play Going to Be?” because of the naive thought that people would comply with what higher officials wanted them to do; in the end, people spent money the way they wanted to spend it or stopped trying to find a job whenever hope was lost. It is difficult to bring an economy out of a recession or decrease the unemployment rate immediately, and it takes time for such drastic changes to occur because people do not have unanimous opinions. Ultimately, the ARRA failed just as the NRA had due to the difficulty in governing people’s actions. The failure of the ARRA and the NRA also expressed the theme that assuming what an entire nation of people would do is naive because people do not act or think similarly, and it is not safe to predict how millions of people would behave, especially during a crisis.

The irony behind the cartoon lies behind the fact that the anniversary of the Stimulus Package was being celebrated despite how negatively people viewed it. It is celebrated because the White House believed the ARRA was good for the economy, but many others thought otherwise as indicated by the burning money. Beeler’s cartoon depicts both standpoints, but the main focus is on how disfavored the ARRA was as shown by making the burning bills the focal point of the cartoon.

Nate Beeler’s political cartoon “Five Year Anniversary,” stresses how much of a fail the ARRA was due to the amount of money it dissipated. Many efforts were put in to save the economy, but the government did not consider the fact that some households or businesses wouldn’t comply with their intentions. The government was unable to dictate the people’s actions, ultimately leading to the collapse of the American Recovery and Reinvestment Act.

Trump’s “Foreign” Policy is a cartoon that seeks to map out some of the ideas that Donald Trump has had about other nations. In the cartoon, Trump is explaining his foreign policy, which includes labels like “RAPISTS” on Mexico, “OUR PAL PUTIN” on Russia, and “DROP BOMB HERE?” in the middle east. All of these labels are references to things that Trump has said about these countries before, and all of them point toward the fact that Trump thinks about the rest of the world in an ethnocentric way, influencing all of his decisions on policy. One policy in particular that Trump is especially vocal about is his policy to keep low-skill manufacturing jobs in the U.S. by putting tariffs on imported goods (Rich). Although Donald Trump seeks to boost the success of American companies by cutting America off from the rest of the world, his policies may only harm American industries like what happened during the Great Depression.

Donald Trump’s motives in his economic policies are benign on a surface level. According to him, one of the biggest problems with our country is that industries are moving production plants out of America since labor is cheaper in other countries, and then these companies are distributing their goods in the U.S. without having to pay taxes for imports. In this way America is losing both low-skill manufacturing jobs and tax revenue from tariffs on foreign-made goods. His policy is to prevent or discourage companies from doing this by putting taxes on their imports into the U.S.

Trump has repeatedly vowed to impose high tariffs – or the threat of high tariffs – to bully American companies into keeping jobs in the United States. His favorite example is Ford Motor Co., which plans to build a massive plant in Mexico. Trump has said that before he takes office he will persuade Ford to change course by threatening to charge the company a 35 percent tax on cars imported back into the United States (Robert).

This policy is a bit more feasible than many of his other policies, but his no-compromise attitude and business background may cause him to force companies to decide between selling to America or to the rest of the world.

So what’s been interesting about Trumpis he has really appealed to this older sense of nationalismas opposed to modern American conservatism. He criticizes outsourcing of jobs to other countries, things like that. So that’s his economic point of view. Then you throw in things on immigration – the Buckleyan conservatives are open to skills-based immigration. Let’s bring the best and brightest from around the world to America. The view is that those individuals are a threat to the people who live here now, and we should only bring them in very, very limited numbers. (Robert)

The kind of America that Trump believes in is a kind of America that is self-sustaining, isolated, and free of foreign influence without benefit. Putting massive tariffs on imported goods discourages trade and encourages consumers to buy domestic goods, but trying to force this has never worked.

Trump is interested in running the country like a business. He seeks to be the CEO instead of the diplomatic leader. This comes into play when he talks about NATO and relations with Japan. “If we’re attacked, Japan doesn’t have to do anything. They can sit home and watch Sony television… They have to pay… It’s got to be a two-way street” (Henderson). Trump is talking about the Treaty of Mutual Cooperation and Security signed in 1960. This treaty requires both nations to defend each other in case of an attack, but article 9 of the treaty stops Japan from coming to the aid of the U.S. in the event of an attack. This treaty was made since “alliance with Japan is crucial for America’s Asia-Pacific strategy and security,” (Henderson) but Trump is instead looking at this alliance as a business opportunity. This goes back to the ethnocentric ideas that Trump has. It is a privilege to use the best military in the world, so other people have to pay for it, simple as that. The only problem is; it is not as simple as that. “Mr. Trump regards treaties with other countries as contracts that needed to be reviewed to see whether they benefited Americans” (Rich). Concerns that are rising about Trump’s relations with other countries are very similar to the concerns brought about by the Smoot-Hawley Tariff. This tariff, passed by Herbert Hoover during the Great Depression, started global trade wars that became detrimental to both American and world economies. If Trump seriously gives up an alliance with the Japanese for lack of profit, he will inevitably set off a chain reaction of instability in Asia, that could spread even further. An alliance with Japan is necessary not only for peace between nations, but also for trade. Donald Trump is trying to look out for his own country, but he is doing it through an ethnocentric lens. Doing this has led to mistakes before, such as when Franklin Delano Roosevelt passed a 42 percent tariff on Japanese cotton in 1936 in hopes of stimulating the American textile economy. This action was later referred to as the “cotton blunder” because of the backfire it caused; Japan responded to this tariff with a counter-tariff and a threat to trade with other nations instead of the U.S.

There are times when being a businessman is useful, but being able to balance this skill with good diplomacy is more important for the President of the United States. Because Donald Trump sees things through an ethnocentric viewpoint, he fails to recognize that benefitting other nations through alliances and trade agreements can be good.

Bibliography

Henderson, Barney. “Donald Trump Savages Japan, Saying All They Will Do Is ‘watch Sony TVs’ If US Is Attacked and Threatening to ‘walk’ Away from Treaty.” The Telegraph [UK] 5 Aug. 2016: 1+. Print.

The cartoon “Boloney!” published on November 27, 1933 by John Francis Knott illustrates the economist, Al Smith, to be very unhappy with Roosevelt’s Monetary Policy. Roosevelt’s monetary policy, in short, is “how the Federal Reserve regulates the money supply and the interest rates to reach or fine tune macroeconomic goals” (McCusker). The essential purpose of Knott’s cartoon is to highlight how recurrent it is for Al Smith to have opposing views towards national policies.

After taking office on March 4, 1933, Roosevelt made sweeping changes. Within two months he had taken the U.S. off of the Gold Standard. “The removal of the “Golden Fetters” and the devaluation of the dollar to $35 dollars per ounce of gold combined with political events in Europe to cause a flow of gold into America. The economy began to recover” (Napier). Ultimately, “Roosevelt took away the gold standard to get people to use federal money on programs in hopes of jump starting the economy” (Fisher). Because of this success, people of the United States were likely to believe that the monetary policy was a good idea.

Roosevelt’s Monetary Policy had great strengths which led him to having many supporters, however, this policy also had adversaries. The most notorious opponent of all was Al Smith. “He was elected as Governor of New York four times and was also the Democratic candidate in the presidential election of 1928″ (George). “Al Smith is known for being an anti-Prohibition candidate”(Richards) which further extends on the idea that Smith supported states rights. Smith’s determination to urge repeal of the prohibition amendment feathered from the fact that he believed in local government majority rather than federally imposed laws and policies. As mentioned in the editorial that was coupled with this political cartoon, even Al Smith admitted that “his severe condemnation of present national policies is not the first time that he has taken the unpopular side of a question” (No Brass Collar). The article, “No Brass Collar”, delves into Al Smith’s past in order to give critical background information. The fact that Al Smith has always been a supporter of states rights further allows for the viewer of this cartoon to understand and analyze why Al Smith is showing so much animosity towards Roosevelt’s Monetary Policy. Because Smith was also extremely anti-FDR, this could lead to the viewer of this cartoon to believe that his animosity towards Roosevelt was the reason why he hated the monetary policy. However, with the accompanying article of “No Brass Collar,” it is evident that Al Smith hated Roosevelt’s Monetary Policy simply because he had been and always was an advocate for states rights.

Analyzing Knott’s carefully illustrated cartoon, the viewer is able to dig deeper into the real issues proposed in the cartoon. The expression that Al Smith exudes is mainly of disgust and resentment towards the monetary policy. In addition, Al Smith has his hand flexed in a manner that is almost his way of saying that the monetary policy is not even worth looking at, that it is worthless. It is evident in the cartoon that Al Smith does not believe that this policy will be successful by any means. Furthermore, with the title of the cartoon being “Boloney!” which is commonly coined to represent foolishness, the reader can assume that to be Al Smith’s reaction toward the “nonsense” that is Roosevelt’s Monetary Policy. The humor in this cartoon comes mainly from the title itself and how the word “boloney” is certainly not a common word used in politics. Also adding to the overall humor of the cartoon is of course, Al Smith’s facial expression. His face is masked into such disgust that one would believe his frown would never turn upside down. There is just enough humor in the cartoon to enlighten the viewer while also still adequately conveying the political component.

In essence, this cartoon depicts the antipathy that Al Smith exudes towards Roosevelt’s Monetary Policy because of his firm belief in local majority versus national regulation. With the accompanying article, the reader is able to understand that the purpose of Knott’s cartoon is to depict the idea that Al Smith is notorious for opposing federal policy, and that his opinion on Roosevelt’s monetary policy would be no different.

In 2008, a large number of Americans were fighting staggering unemployment, plummeting house prices, and a complete meltdown in their retirement accounts. Naïve homebuyers and controversial banking practices had created the biggest financial catastrophe since The Great Depression.

In the years leading up to 2008, the financial sector utilized loose lending practices to qualify individuals with low income and poor credit to purchase homes. This collection of homebuyers was known as the subprime mortgage market (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 340). By extending credit to an unqualified subprime mortgage market, the banks created an artificial surge in demand for housing, consequentially inflating house prices (Arner, 92). To further fuel demand for their mortgage products, the banks provided options for small down payments and low introductory rates (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 340). These types of lending tactics enabled individuals in the subprime mortgage market to buy bigger homes than they could actually afford (Arner, 92). As introductory rates began to expire, these homeowners were unable to make their full monthly payments and the number of foreclosed homes rose at a startling rate (Hirsh, 38).

The increasing foreclosures led to a degradation of the entire real estate market and caused downward pressure on housing prices overall (Arner, 93). Suddenly homes were not worth enough for banks to recoup their loans amounts from the perpetually growing defaulters in the subprime mortgage market (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 340). Accordingly, the banks were forced to take huge accounting losses for their failed loans (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 340). The resulting downturn in the housing, financial, and consumer sectors had a ripple effect throughout the entire economy. Consequently, stocks and bonds of just about every company tanked. Small investors who were invested in mutual funds of stocks and bonds through their retirement accounts, college funds, and pensions were unexpectedly devastated (Arner, 96). Government officials were afraid of the economic ramification of the financial sector collapsing and the lack of consumer protection available to subprime mortgage borrowers (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 341). Therefore, they offered assistance programs to the subprime mortgage borrowers and created enormous bailout plans for the vast majority of the financial sector (“U.S. Housing Bubble and Credit Crisis in the Late-2000s”, 341). On the other hand, many small investors were losing a large part of their life savings and were left to deal with the consequences on their own.

The article, “More Zeroes for Investors,” described the multi-billion dollar loss in the stock market caused by the subprime mortgage crisis. Specifically, it highlighted the large percentage drops in each sector of the market and the impact of those declines on small investors (Craig, 1). The editorial provided an anecdote from a non-profit worker, Barron Segar, who was too afraid to look at the computer due to the falling mutual fund prices but considered buying more funds if the downtrend continued (Craig, 2). It also described a 59 year-old doctor, Roy Steiman, who planned to purchase additional shares in Bank of America and mentioned, “If Bank of America [failed, we’d] be in big trouble” (Craig, 1). Through those examples, the article emphasized the hopes of people like Mr. Steiman and Mr. Segar as they looked to recoup their losses by purchasing additional shares at lower prices. The editorial also underscored the notion that these individuals were undoubtedly afraid of further losses. Mr. Segar was quoted as saying, “I think the biggest lesson that investors [learned was] that there [was] no safe haven” (Craig, 2). Another example of investor fear in “More Zeroes for Investors” was a story about Mr. Segar’s father. He was described as a 76-year old man who was heavily invested in financial stocks due to his employment within a bank trust department (Craig 2). It could be inferred that he was nearing retirement age and depended on those investments to provide him support. Mr. Segar expressed concern for his father in the article and mentioned, “My dad [was] going to fall over when he [received] his next statement” (Craig 2). The article concluded by noting other areas of the market which were likely to be pushed down and provided a forecast for the general downtrend in the economy to linger (Craig, 2). In short, as there was more pain ahead for the stock market, small investors were expected to continue to get hurt.

The political cartoon, “The Credit Crunch” also portrayed the suffering of small investors as it illustrated the interaction between the three primary participants in the 2008 credit crisis: “small investors”, the “subprime mortgage market”, and the “finance sector”. The involvement of these groups was shown through a car accident in which the small investors were crushed in between the subprime mortgage market and the finance sector. Though there were several elements that contributed to the 2008 credit crunch, the artist placeed an emphasis on the general obliviousness of the subprime mortgage market and the cold-hearted greed of the finance sector.

In “The Credit Crunch”, the finance sector was driven by a pointy-nosed chauffeur inside of a large Roll Royce. This representation alluded to the enormous amount of wealth generated by the banks using their loose lending policies. It also underscored the greed that was involved in carrying out their deceptive practices. The subprime mortgage market was shown through what appeared to be a lone driver in a giant SUV. This portrayed the consumerist nature of the subprime mortgage market participants and their inclination to purchase items that were larger or more expensive than necessary. The finance sector was depicted as leading the pack and could be seen as the forerunner in the crisis. The subprime mortgage market was thoughtlessly following the path laid out by the finance sector unaware that it caused small investors to suffer.

The individuals shown inside the cars also contributed to the message of the artist. The finance sector participants were shown with emotionless, forward looking faces, which indicated their apathy towards the individuals they had hurt and the general unawareness of the destruction they had left in their path. The individual shown inside the subprime mortgage market vehicle looked young and clueless. His youthful demeanor and wide-eyed smile indicated his naïve nature and obliviousness to the damage caused by his actions.

Both the subprime mortgage market and finance sector were illustrated as larger vehicles that were seemingly damage free. Meanwhile, the artist portrayed the small investors with a tiny automobile that was completely crushed and had a life-less hand of one its passengers hanging out from the side. It appeared that there were many passengers inside the small investors’ car; however, they were shown without faces in order to possibly hide the emotional turmoil they encountered. Through an otherwise humorous medium of a political cartoon, the author emphasized the seriousness of the anguish and devastation felt by small investors during the 2008 credit crisis.

The article, “More Zeroes for Investors”, and the cartoon, “The Credit Crunch” both highlighted the damage the banks and the mortgage market created for the small private investors during the 2008 Credit Crisis. The excessive borrowing, lending, and fear in the markets that were seen in the modern credit crisis echoed the events that led up to The Great Depression (Arner, 98). The 1931 Knott cartoon, “Urgent Letter to Santa Claus” and the accompanying editorial, “Panic or Prosperity” referred to the extreme borrowing of Germany following the First World War that ultimately led to the disastrous Great Depression. Likewise, the concept of over-lending and over-borrowing was present in the modern credit crisis between the banks and the mortgage market.